UE net profit falls 76% to S$11m in Q2

UNITED Engineers (UE) on Monday posted a second-quarter net profit of S$11 million, down 76 per cent from S$45.4 million last year as revenue fell 23 per cent to S$96.2 million.

This was mainly attributable to lower revenue from property development, and the absence of contribution from its liquefied petroleum gas (LPG) business which was divested towards the end of 2017, the company said.

On a per share basis, profit for the three months ended June 30 fell to 1.7 Singapore cent, from 7.1 Singapore cents a year earlier.

No dividend has been declared for the current financial period, unchanged from the preceding year.

Revenue from property rental and hospitality decreased 5 per cent to S$31.2 million in Q2 2018, while revenue from the property development segment fell 54 per cent to S$9.9 million.

Meanwhile, engineering and distribution revenue decreased 36 per cent to S$22.4 million, while revenue for its manufacturing business fell 11 per cent to S$18.6 million for the quarter.

For the half-year to June 30, the group posted a 63 per cent drop in net profit to S$20 million, as revenue fell 13 per cent to S$201.4 million.

Nonetheless, excluding revaluation gains on investment properties of S$45.4 million, and impairment loss on properties held for sale of S$8.9 million recorded in the first six months last year, attributable profit in H1 2018 would have increased 35 per cent from S$14.8 million in the year-ago period, UE said.

Looking ahead, the company noted that trade protectionism, policy uncertainties and escalating geopolitical tensions may weigh on global economic growth.

"While the new round of residential property cooling measures by the Singapore government may impact the sentiment of the residential property market, the office rental market in Singapore may continue to see steady recovery," UE said.

The group added that it is embarking on asset enhancement initiatives for its investment properties in Singapore, and may take on acquisitions if and when the opportunities arise.

Elsewhere in China, property cooling measures have also brought about a relative slowdown in activity in certain cities, but the demand for good quality housing remains, and the property market may continue to see sustainable growth in the longer term, UE added.

Shares in UE closed at S$2.69 apiece on Monday, up 0.4 per cent or one Singapore cent, before the release of its financial results.